Scalzi: Back Into Quarantine—Noted
Mitrovitch—America Remains Poised for Greatness—Noted with a "WTF!?!?"

Blanchard: Reopening the Economy—Noted

Olivier Blanchard: Reopening the Economy https://www.youtube.com/watch?v=rrFIFWgDXuk&feature=youtu.be: 'Where we are depends on whether you're in Europe or not and where in Europe you are. But there are, I think, commonalities.... The stop was a policy decision based on very good health policy reasons. So the worst was at the beginning. From then on, it just goes up. The question is: at what speed? There I see three phases:

  1. In the very short run you end lockdown and allow firms to start again, even if not at full speed.... You are then going to make up part of the fall.... My sense is in most european countries where the virus is more or less under control you can make up about two-thirds of the fall. In the U.S. where things are not so good and people are... scared... then it could be that we only make up half....

  2. In the period between the end of this first one and the vaccine—the time when... we can stop physical distancing, restaurants can go back to the normal way they do business, people take planes without thinking too hard, and so on—recovery is going to be much slower because many sectors are still going to be affected... in a fairly strong way.... This would be a very tough period for a large number of firms and a large number of workers....

  3. Then the vaccine comes, hopefully sometime next year, and then we have... the long-run changes and reallocations. We don't have a good sense of whether... it is going to be the type of relocation we always see, or something much worse... structural unemployment for quite a while....

I am worried that people are going to see the numbers in the short run and think "Oh! Things are just fine."... Yes, for a while we're going to go up fairly fast.... IN the short run things are going to go better than people fear.... And in the medium run things might go worse than people hope.... I am slightly worried about optimism leading people and maybe governments not to do the right thing.... It starts like a "V" but very quickly it turns into something much more horizontal.... If we are not careful the horizontal portion could be long and bad....

In retrospect... with information we now have... maybe the lockdown was too strong. Maybe there was a way of doing it with slightly less economic cost. Now that's not a criticism of what was done because the precautionary principle is obvious... But it may be that it turned out to be more costly—economically, psychologically, and maybe politically—than we anticipated....

One thing that does seem possible in the long run is that machines don't get the virus, making robotization and all such trends accelerating even more....

We're facing two types of shocks looking forward: (1) shocks due to the presence of a virus at some fairly high level of intensity, [and] these will likely go away when the vaccine is here (think of restaurants)... (2) the hysteretic effects... when we've learned to do things differently... learned about different risks—telecommuting and all its implications is the quintessential example...

.#coronavirus #macro #noted #publichealth #2020-07-05

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